Nonbank mortgage lender and originator Ocwen Financial Corporation generated a $21.5 million profit in the third quarter, reversing the $9.4 million loss in the same period of 2020. In the previous quarter, the company had reported a loss of $10.3 million.
Total revenues increased 13% year-over-year to $282.1 million. Meanwhile, operating expenses declined 2.74% to $145.4 million. Other income and expenses went from $77 million to $121 million in the same period.
Glen Messina, president and CEO of Ocwen, said the financial performance exceeded the company’s expectations and resulted from strong originations, solid operational execution, and continued focus on cost reduction. The return on equity was 19% in the third quarter, compared to a negative return of 9% one year before.
The total servicing portfolio increased 38% between the third quarter of 2020 and 2021, to $248 billion in total.
Origination volume grew 61% year-over-year to $667 million in the third quarter. Reverse origination, however, went from $230 million in the third quarter of 2020 to $428 million in the same period of 2021. The company said the Reverse Mortgage Solutions reverse servicing platform acquisition was completed in October.
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Ocwen is investing in a multi-channel origination platform. In the direct consumer channel, volumes were up 61% year-over-year. The correspondent channel grew 179%, mainly because the Texas Capital Bank lending business is integrated.
In April, Ocwen announced it acquired the entire $14 billion book of mortgage servicing rights of Texas Capital Bank through its subsidiary PHH Mortgage. In total, the deal added 200 new correspondent sellers and 60,000 loans to PHH’s business.
According to Messina, the multi-channel platform has delivered more than $100 billion in new servicing over the past three quarters.
“We are focused on maintaining our profitable growth momentum by expanding our addressable markets through new products and services and continued client expansion,” said Messina.